Manufacturing Activity Climbs for Sixth Straight Month
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Good news for U.S. factories' role in the economic turnaround came Monday as the manufacturing activity grew for the sixth consecutive month in January, and now sits at the highest level since the summer of 2004.
The Institute for Supply Management's manufacturing index rose to 58.4 for the first month of the year, up from the 54.9 reading in December. Analysts had expected a level of 55.5, while a reading above 50 indicates growth.
Along with the annualized gross domestic product growth of 5.5 percent, the ISM report suggests that the economy is picking up momentum in the first quarter after posting the best quarterly performance in six years.
The ISM's new orders index registered 65.9 in January up from the 64.8 in the previous month, while production jumped to 66.2 from 59.7 as factories ramp up to replenish the depleted inventories across the sector.
Showing the biggest improvement was the prices paid index with a reading of 70.0, versus the consensus of 62.4, and up from the 61.5 in December.
The ISM's manufacturing employment index suggests that jobs are being added in the sector, as the reading rose 3.1 points to 53.3 in January, the highest level since April 2006.
The service employment reading of the ISM was decidedly weaker at 43.6 for December. The service employment sector employs nearly nine in ten U.S. workers. Analysts are expecting the reading to remain under 50 when the January report is released Wednesday.
The employment report to come Friday from the Labor Department will be closely watched as the loss of 85,000 jobs in December and the nearly eight million lost since the onset of the economic recession.
The consensus for Friday's report is a flat reading, as the job creation remains a hot-button topic for the Obama Administration with the unemployment rate at 10 percent. The unemployment rate is traditionally one of the last areas to see growth following a recession.
The Institute for Supply Management's manufacturing index rose to 58.4 for the first month of the year, up from the 54.9 reading in December. Analysts had expected a level of 55.5, while a reading above 50 indicates growth.
Along with the annualized gross domestic product growth of 5.5 percent, the ISM report suggests that the economy is picking up momentum in the first quarter after posting the best quarterly performance in six years.
The ISM's new orders index registered 65.9 in January up from the 64.8 in the previous month, while production jumped to 66.2 from 59.7 as factories ramp up to replenish the depleted inventories across the sector.
Showing the biggest improvement was the prices paid index with a reading of 70.0, versus the consensus of 62.4, and up from the 61.5 in December.
The ISM's manufacturing employment index suggests that jobs are being added in the sector, as the reading rose 3.1 points to 53.3 in January, the highest level since April 2006.
The service employment reading of the ISM was decidedly weaker at 43.6 for December. The service employment sector employs nearly nine in ten U.S. workers. Analysts are expecting the reading to remain under 50 when the January report is released Wednesday.
The employment report to come Friday from the Labor Department will be closely watched as the loss of 85,000 jobs in December and the nearly eight million lost since the onset of the economic recession.
The consensus for Friday's report is a flat reading, as the job creation remains a hot-button topic for the Obama Administration with the unemployment rate at 10 percent. The unemployment rate is traditionally one of the last areas to see growth following a recession.
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